We often hear of the negative impact of Financial Fair Play (FFP) on a club’s ability to spend money k the transfer market, but it is just the opposite at Stamford Bridge where Jose Mourinho has the green light to spend big as Chelsea will have access to over £40 million in extra Financial Fair Play cash this summer.
Chelsea’s new £200m Yokohama shirt sponsorship, the transfer of Fernando Torres and the new contract for Eden Hazard will boost Chelsea’s transfer kitty this summer.
The Yokohama shirt sponsorship that was signed at the end of last month is worth around £40m-a-year, which is £22m-a-year more than Chelsea have been receiving from Samsung. Even without factoring in any further player sales, new contracts, commercial revenue or the increase in television money for Premier League and Champions League clubs, Chelsea have already freed up more than £40m in FFP cash through Torres, Yokohama and Hazard’s new contract.
According to Jake Cohen of LawInSport, Chelsea have also saved themselves money on FFP by handing Eden Hazard a new contract, even though they have increased his wages to £200,000-a-week.
Hazard’s annual FFP cost after joining Chelsea from Lille was £16.02m, but that figure will go down to £13.31m from this summer due to the fact his remaining book value is now spread over the next five-and-a-half years.
“It is not widely known outside football accounting that clubs can actually save themselves money in terms of FFP costs by giving their players new contracts, even if they are earning more,” said Cohen.
“Although Hazard’s wages have increased from approximately £9.62m a year to £10.4m annually, his FFP ‘book’ value has gone down. That’s because his £32m fee was amortised at £6.4m a year over an initial five-year contract.
“That deal had two-and-a-half years left to run, so the remaining £16m in ‘book’ value was spread out over the new five-and-a-half-year contract Hazard signed in February, decreasing his annual FFP cost from £6.4m to £2.91m.
“So even with the increase in wages, Hazard will cost Chelsea £2.71m less a year in FFP money from this summer.”
At first glance, £40 million does not seem like a huge amount, but under FFP rules it could allow Chelsea to comfortably buy Juventus midfielder Paul Pogba, or it could account for just over 75 per cent of the freedom a club would need to sign Barcelona star Lionel Messi.
So how does £40 million equate to meeting Messi’s Barca buy-out clause of £180 million (250 milion euros)? Over a five-year contract that fee would be amortized to £36m a year in terms of FFP. The 27-year-old’s annual wage at Barca is £16.3m, making his total annual FFP cost £52.3m.
Chelsea could sign Pogba without any FFP problems. The player’s agent has set his value at £74m and the former Manchester United youngster would no doubt want parity with Hazard’s £200,000-a-week wages, meaning Pogba’s annual FFP cost over a five-year contract would be £25.2m.
Do you think Chelsea will sigh either Pogba or Messi this summer? If they can sign only one, which one would you want to see if a Chelsea shirt next season?